We're fans of Times wunderkind Andrew Ross Sorkin. Since he started writing for the paper in high school, he has built himself an admirable career based on sound reporting and thoughtful, articulate writing. Plus, he has dreamy eyes. But occasionally, as the economic crisis has raged, his DealBook column has taken on an awesome fed-up tone, like Sorkin — tie loosened, hair ruffled — is sick of all the bullshit and he's going to tell it to you straight. We love these times, because it seems like dude is finally having a little fun and, more, because it usually means he is about to posit something that is kind of wrong. Which is what he did today when he argued that everyone should suck it up and let AIG have their bonuses.
"It sure does sting," he writes. "A staggering $165 million — for employees of a company that nearly took down the financial system. And heck, we, the taxpayers, own nearly 80 percent of A.I.G." He breaks it down:
A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.'s book. Why not? They know how bad it is. They built it.
What now? Is that a secret? We're calling our brokers now and finding out how to trade against AIG's book! Except, obviously, we don't have a broker. And, obviously, we all know AIG is bad. And, obviously — we hope — the government is not going to pay out these bonuses because they are afraid that the very "talent" responsible for getting the insurer into the credit default swap market might leave their jobs and start working against them. Because rewarding such people is exactly what you wouldn't want to do if you were trying to rebuild the system and change the culture of Wall Street. Now, Sorks, get some rest, for God's sake.
The Case For Paying Out Bonuses At AIG [Dealbook/NYT]